Ask a tax advisor on the topic of Real estate taxation

Property developer - Real estate transfer tax when purchasing the plot of land to be developed.

January 3, 2020 | 35,00 EUR | answered by Steuerberater Knut Christiansen

Good day,

I intend to carry out a construction project myself as a property developer.

For this purpose, a plot of land with an old building (settlement house) is to be purchased. The house is to be demolished and the plot of land is to be developed with two houses, each with two semi-detached houses, i.e. 4 semi-detached houses will be built.

The division will be carried out according to the Condominium Act (WEG).

My question now is:
Do I, as a property developer, have to pay real estate transfer tax for the initial acquisition of the property, even if I act as a property developer in the notarial purchase contract and the intention to develop the property further for new construction is evident?

Or does the real estate transfer tax only apply later, in full, to the buyer of one of the semi-detached houses on the total purchase price?

Thank you in advance and kind regards,
G. F.

Steuerberater Knut Christiansen

Good day and thank you for using frag-einen.com!

The real estate transfer tax generally applies to every acquisition, unless an exemption provision applies. However, based on the description of the situation provided by you, this does not seem to be the case. Therefore, as a property developer, you will also have to pay the real estate transfer tax on the property acquisition. The future buyers will also have to pay the real estate transfer tax for the new construction. Therefore, you should include the real estate transfer tax you will have to pay in your calculation.

I hope this answers your question, if not, feel free to contact me with your follow-up question.

Best regards,

Knut Christiansen
Tax advisor